This sounds almost like the Iraq plan. Push is into something that we don't fully understand. We should not have to pay 700 billion for crappy assets. We need to negotiate a lot better deal.
i hate this administration so much but i dont find anything wrong with this the plan was a contingency. i would hope that they would formulate a plan if something was to go wrong (and it did) i would be even more pissed if the administration threw something together in the past week since it wouldnt/couldnt forsee something like that.
^ I don't see anything wrong with the Tres Dep't having a contingency plan in case more banks failed after BSC went under (that was back in March)....I would hope they would have drawn up a plan....which they were right to keep on the shelf rather than spook everybody.
I would be less worried about the hidden implications of this bailout if it was any other administration other than Bush.
Dude, you shouldn't start a debate on something you don't understand. This just makes you look silly.
If they had it, that means they also had a reasonable idea that it might happen. If that's the case, why didn't they talk to some folks? Even with the Iraq stuff, they would occasionally brief the Committee Chairs. Everyone wants to compare this financial crisis to a fire, but if we have a contingency plan for the worst case scenario, we always let our partners and cooperators take a look at it and see if they can implement it before it happens. This has been pitched as response to an immediate crisis... if they had months to come up with this and this is the best they could do, they were definitely trying to do something other than their stated aims. And really, I'm sick of hearing about the psychology of Wall Street. People are scared! People are uncertain! People are in panic! People might lose money! People need things kept from them so they don't do something stupid! Ooooooh! Well what do you think the rest of America is going through right now? Yet we're not whimpering about it. These guys are supposed to be the Masters of the Universe... the best there is... yet our whole financial system has to revolve around their moods. Screw that. Man up you freaking pansies. Wall Streeters want the wealth, fame, and acclaim of an NFL QB but need to have everyone be quiet and still so they don't get nervous, like some hack on the golf circuit. Could there be a bigger group of WATBs in our country?
Oh, I think I quite understand that this is the worst administration ever. The proof is incontrovertible. As far as contingency plans go, I think I understand those as well... the whole point is to try and understand what is possible, not just what you want. This administration put together a plan that reflects their desires and they did it without consultation and then told everyone you have to do this or else. That's BS.
I should add that anyone who looks at this merely through the lens of finance and without considering the track record of the administration that is proposing this is an absolute fool.
First, I doubt that Tony Fratto was party to these plans at all or that anybody outside Treasury or the Fed had any idea what was going on and when, and suggest that he's probably overplaying his hand as to how much these guys had planned for this. Second - I think if they did plan, it wasn't for a crisis nearly as severe. This doomsday scenario took everyone by surprise with the unprecedented speed at which it unfolded. These things happened overnight literally. Third - I don't blame Bernanke for keeping these plans in house. I attribute most of them to him since he's the brains of the outfit. He basically has to, every time the Fed Chairman sneezes markets go haywire.
"dispatching Vice President Cheney... up Pennsylvania Avenue to jawbone lawmakers." Congress - "GO F**k YOURSELF, MR. VICE PRESIDENT."
He's the White House spokesman. I don't know how to respond to the notion that the White House spokesman doesn't know what's going on except to say it's another data point for not trusting this administration. Even so, it seems it is incumbent on you to show Fratto had no idea what he was talking about. (I fully expect the WH to come out quickly with a statement saying just that, because the idea that they were waiting to game the system will hurt them as they try and game the system.) Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. Again, here's what Fratto said... do you have any kind of evidence that they were planning for a lesser crisis? I do. And I'd like to remind you that the market went up just on the rumor of a rescue last week. Again, the purpose of contingency plans are to prepare everyone for a crisis possibility, not spring it on them in the middle of the crisis.
For now, I only see the plan was from Paulson and Bernanke, which I think for the most part have been doing a reasonable job considering the circumstances. As for putting the plan out for discussion, you pretty much guarantee what happened last week will happen if they did that. Their job is to have a plan in place in case something really bad happens, not to trigger it.
Let's see, start with Ari Fleischer, move on to Scott McClellan, Dana Perino etc etc etc. None of these whitehouse spokesmen have shown the slightest compunction about lying or exaggerating - why would this be an exception? Yes - Paulson and Bernanke had no clue that AIG could go under and were pretty much certain that they could get a bridge loan but didn't - then they had to do a 180 later in the day and whip up the 85bb. Read any of the articles about them recently (WSJ, NYT, Bloomberg)- the last week they've been working nonstop to hold the dike. Doesn't exactly sound like everything going according to plan. I don't think in this case that making your contingency plan public is a great idea because it builds the moral hazard that people are whining about into the system ex ante.
Not quite to the point, but OK. Remember all those articles about Iraq from the NYTimes, WSJ, and WaPo? All of those stories were exactly true and not influenced by the administration at all so we obviously need to go along with the current fear-mongering. Well, if it's a plan like this... which is not really a contingency plan at all, but more like the last fleecing of the Bush administration... I see your point. But that would also be the reason for making it public and letting the Congress have a whack at it... the players could tell what kind of penalties and regulation would come down if the plan had to be imposed. Krugman makes a very good point here... Paulson got his start under Nixon and now works for W. There's absolutely no reason to trust any of them on this and if the Street can't handle it psychologically then that's a definite sign we need to change it in a big way.
Come on - you are smarter than this. Apples and Oranges. You really think all those midnight meetings and the related stories about the desparate race to save the economy were just a big sham perpetrated by planted sources and Ben, Hank & the boys were kicking back and relaxing, watching football the whole time? That's silly. Doesn't matter what kind of a plan it is - if you have congress debating an "all the banks fail" bill right when teh banks are about to fail and their ratings are under review - you basically create a self-fulfilling prophecy that all banks will fail.
Interesting artcile in The Nation about AIG's ties to the McCain campiagn... http://www.thenation.com/doc/20081006/ames Bankrupt AIG Underwrote McCain's 'Reform Institute' By Mark Ames September 19, 2008 John McCain is making a big show of criticizing the government "bailout" of insurance giant AIG. But it turns out that AIG, which received $85 billion in US tax dollars earlier this week, is one of the largest donors to McCain's pet think tank, the comically named "Reform Institute," which he co-founded in 2001 "in direct response to the millions of Americans who, during the 2000 presidential campaign, expressed profound disillusionment with corrupt fundraising activities." Apparently, AIG was so troubled over the issue of corrupt fundraising activities that they loaded in as one of the top VIP donors in McCain's nonprofit think-tank, whose website lists AIG in the "over $50,000" donor category--although exactly how much over that $50,000 is still unclear. Nor is it clear why AIG had any business donating so much money to a think tank whose work in no way overlapped with the insurance company's--unless, of course, that money was just meant to gain access to McCain. The "Reform Institute" has taken a lot of heat as a front organization designed to funnel money to McCain's political career. As Ari Berman wrote, McCain's campaign co-chair, Rick Davis, served as the president of the nonprofit Reform Institute for three years, earning $395,000 in salary. Davis also headquartered his lobbying firm, Davis Manafort, in the Reform Institute's offices at that time. He is just one of several McCain people who passed through the Reform Institute's revolving door while McCain prepared for the 2008 campaign. McCain formally stepped down from his own institute in 2005, but he remains deeply linked to the Reform Institute to this day. So when McCain declared this week that "The government was forced to commit $85 billion" to his mega-donor AIG, the question becomes, "What forced you to do it?" The American taxpayers never got a red cent in donations from AIG--but now, they're being forced by people like McCain, whose career profited from AIG donations, to buy his backer's massively indebted trash heap in what can only be described as the worst business deal in this nation's history, or the worst example of crony nationalization. AIG isn't just funding McCain's policy think tank, it's also quite literally thinking for the presidential hopeful. Martin Feldstein, who serves on the board of AIG, is one of McCain's top economic advisers. Earlier this month, Feldstein gushed in the Wall Street Journal over McCain's plans to cut taxes even further, and to shift healthcare costs from employers to employees in a "tax credit" scheme that many believe will solely benefit insurance companies, at the expense of workers. Since AIG is--or was--the world's largest insurance company, it stood to gain from McCain's policies. The one thing Feldstein does understand is insurance. Feldstein and his cronies at AIG essentially bought themselves an insurance policy--you might call this type of insurance "in case our insanely corrupt, hyper-leveraged operation should ever go bankrupt" insurance--with donations like the "over $50,000" given to McCain's Reform Institute. That insurance paid off handsomely and like clockwork with the government's $85 billion nationalization. It's exactly the kind of insurance policy deal that every American has dreamed about, but never known. And never will know. Now that Feldstein and McCain have successfully worked the American public in the AIG scheme, they have a plan for the entire American economy. They're calling it "reform." And the first thing they want to get their hands on is your health insurance, or what's left of it. So if you've been asking yourself lately, "Can it get any worse?" the answer was put best in a horrible '70s classic rock song by Bachman-Turner Overdrive: "B-b-b-baby you just ain't seen nuthin' yet!"
And you are much, much smarter than that... I've never said there wasn't an issue, but I do not think it is as grave as has been expressed by the administration or the folks who stand to benefit from a $700,000,000,000 handout. There's no question we have to have changes and some of those are going to hurt, but there have to better solutions than simply handing over that amount of money to this administration. If that happens, then they were meant to fail. And if they fail, then I have to believe that in the long run, that's for the best, regardless of what short-term pain there might be... my oldest is 10 now and I'm looking out 15 years... I'd rather take the pain now no matter how severe then have my kids deal with it when they start their lives. As an aside, I used to think how lucky I was that I didn't live during the Red Scare or the McCarthy Era, then Bush came. I also used to think how lucky I was that I didn't live through the Depression. Now Bush is here.
